Facebook Joins Forces With Data Brokers To Gather More Intel About Users For Ads

Facebook is tapping into information from data brokers to help advertisers better target their ads on the social network

When I visit Facebook, I seem to keep getting the same old ad for a dentist who offers discounts to Duke alumni. That's despite Facebook's significant changes in the last few months to make its advertising far more robust. Advertisers can target specific Facebook users if they know their email address or phone number; they can target them based on their Web browsing outside of Facebook; and Facebook can tell advertisers whether a user bought a product in a store after seeing an ad for it on the social network. Still, it's just that dentist coming after me. That may change with Facebook's latest announcement. As first reported by Ad Age, the social giant is teaming up with four data brokers to incorporate their rich data about consumers -- such as purchase information from shopper loyalty cards -- into profiling Facebook users so advertisers can hit them up with what they hope are better ads.

So what does that mean exactly? Facebook has partnered with four companies, Axciom, Epsilon, Datalogix and Blue Kai; these used to be rather obscure names but are increasingly familiar ones as more scrutiny comes to the practice of collecting data about consumers and using it to profile them for ads, sales opportunities or cold shouldering. Those companies have put millions of consumers into all kinds of different groups based on information collected about them from a variety of sources: they have lists such as "world travelers," "couch potatoes," "entertainment lovers," "luxury seekers," "cola drinkers," "animal lovers," "thrill seekers," "not-interesting-in-any-way-avoid-at-all-costers," etc. You're already getting ads around the Web based on whichever groups you've been placed into thanks to advertising networks dropping the appropriate cookies on your computer. Now these companies will compare their lists to the Facebook list and try to match people up by their email addresses and phone numbers (all in a hashed and private way that does not involve an information exchange, says Facebook) so that similar targeting can happen with Facebook ads. Essentially, it allows for better slicing and dicing of Facebook user data.

So, rather than, say, Gatorade only being able to advertise to a Facebook user who has actively "Liked" Coke, it could use this new Facebook service to target its ads more generally at "cola drinkers" (which is probably a much larger pool) -- betting on the fact that Epsilon, Axciom, Blue Kai or Datalogix has the goods on which users have chugged soda recently (which they probably have thanks to that loyalty card you swiped at Safeway when you bought that six-pack of Cherry Coke).

"We don’t share private information with marketers. There’s no information exchange," says Facebook spokesperson Elisabeth Diana. "What we’re doing today is allowing businesses to work with these [third party data brokers] to create campaigns on Facebook. Rather than getting a random ad that’s kind of spammy, why don’t you get an ad that’s relevant to you?”

Diana says these ads will start appearing in beta in the next week. They will include a disclosure (if you hover over the ad and click "About this ad" for more information about it) which will tell you that the information used to target you with a particular ad came from a particular data broker, though it won't tell you which "cluster" (a.k.a. "cola drinker") you are in.

I asked Diana how Facebook chose these four data brokers as partners. "We vetted who was good at privacy because the privacy aspect was really important to us," she replied.